Jim Steinlage, president and CEO of IT solutions provider Choice Solutions, compares his customers’ relationship to Choice Solutions to that of consumers to their local water tower. No matter where you’re at in town — home, a restaurant, church, or the local fitness center — when you turn on a water faucet you expect to have cool, clean water that flows at an acceptable pressure. In Choice Solutions’ case, the water lines are its customers’ IT networks and the water is the applications its customers access over those networks. One key aversion many of Choice Solutions’ customers share is downtime. “Some look at this need as a backup and disaster recovery [BDR] issue,” says Steinlage. “But, BDR is just about having a safe copy of your data if your main server fails. It’s like having water in the water tower but being unable to get water at your house. Business continuity is what VARs and MSPs need to focus on with their customers.” The majority of Choice Solutions’ customers have an RTO (recovery time objective) that falls in the one-totwo- hour range, which means that if the water stops flowing for any longer, the company gets dehydrated.

Finding a backup and business continuity vendor partner has been a challenge for Choice Solutions. According to Steinlage, he’s evaluated six or seven over the past couple of years. “Some solutions required multiple agents be deployed on the customers’ devices in order to properly replicate the data, which was a time-consuming process,” he says. “Others were cumbersome to keep updated, and we’ve even been in situations where a system didn’t failover properly when we needed it to.”

One solution that hasn’t been a disappointment to Choice Solutions is Unitrends Enterprise Backup solution, which supports virtual (Microsoft Hyper-V and VMware vSphere), physical, and cloud backups. Since deploying Unitrends Enterprise Backup, Choice Solutions has had two customers that experienced disasters. “One customer’s server failed, and another one accidentally deleted an important file off its server,” says Steinlage. “In both cases, the Unitrends solution worked as advertised, and we were able to quickly get the water turned back on again. Unitrends has figured out how to simplify the process of data and operating system replication — including the pricing, configuration, and installation process. Plus, most important, it works consistently.”

If you’re currently selling backup and business continuity solutions, there’s a good chance you’re offering a disk-based solution that includes a local backup server coupled with a remote backup solution. However, have you considered what you could be missing by not also selling flash-based storage? In a recent article in ComputerWorld, titled “Flash Storage Can Help Some IT Operations,” the author shares the results of a survey of 255 IT professionals, conducted by TheInfoPro, which revealed about 7% were currently using all-flash arrays and another 6% said they were planning to make the move within the next 18 months. Even more revealing was the fact that another 37% of respondents said they planned to implement less-expensive solid state disk solutions in the near future. Other research corroborates these findings. According to IC Insights, flash revenue will overtake DRAM (dynamic random access memory) revenue by 2016. An IDC study revealed that solid state storage revenue doubled between 2010 and 2011 — going from $2.4 billion to $5 billion.

One reason for the growing interest in this technology is that as more companies evaluate flash storage, they’re finding impressive results. AMD, for example, recently deployed a 6 TB flash storage array from WhipTail, which helped reduce latency by a factor of 50 and yielded a 40% performance improvement over its hard disk drives.

According to Thomas Isakovich, CEO and founder of Nimbus Data Systems, its storage costs were previously at around $12.65 per gigabyte for the hardware, RAID (redundant array of independent disks) overhead, file system, software licenses, and first year of support. With the unveiling of its Gemini Flash Memory Array this year, the cost per gigabyte is now 20% lower, making this a viable solution not just for large enterprises, but many of your midmarket customers as well.

Isakovich emphasized this is not a fit for small businesses yet, but it is for medium-tolarge businesses that meet the following criteria:

1. Businesses that need very responsive databases. One example is The Allant Group, a 245-employee, $43 million company that provides marketing analytics solutions, which implemented a flash memory platform to power its business-critical Oracle databases and reaped a 10x improvement in transaction performance and an 80% reduction in operating expenses.

2. Businesses with at least 200 virtual desktops and/or 550 virtual servers. Virtualization and flash storage go hand-in-hand, with users reporting up to 16x improvements in boot-storm performance. During its virtualization benchmark tests, AMD reported it was able to achieve 86,000 I/Os per second for virtual machines that previously performed at only 6,000 I/Os per second.

If you have customers that meet these criteria and you’re not yet offering flash-based storage solutions, now’s the time to start investigating these offerings as a complement to the hard disk drive solutions you’re currently selling. Contrary to the opinions you may have formed years ago about flash storage (i.e. too expensive, not reliable enough), it’s come a long way since then, and it’s generating tangible benefits for the companies using it as well as the VARs and MSPs selling it.

Choice Solutions was a $21 million general practice networking VAR when we first spoke with their president and CEO, Jim Steinlage, back in April 2009. The company was projecting 17% growth at a time when the economy was tanking. Three years later I caught up with Jim Steinlage to see how things turned out and was surprised to hear what he had to say. Not only had he made radical changes to his business that were unprecedented in my seven+ years interviewing VAR and MSP (managed services provider) business owners (e.g. he eliminated five business practices, which initially cut his number of employees and revenue in half), but the results were equally surprising. Before I share the three most important decisions Choice Solutions made three years ago, which are contributing the most to its growth and profitability, let me share the one word Steinlage believes sums it all up. Focus. That one simple word is what this MSP president believes turned his average channel business into a world-class organization. “I think too many companies are too diversified, just like we were three years ago,” he says. “This business works just like a healthcare practice. Which doctors have the longest waiting lists and charge the most money? It’s the specialists, not the generalists.”

Step 1: Determine Which IT Practice Is Most Important, Sell Off The Rest
In the 2009 time frame, Choice Solutions was a 60-employee IT solutions provider and MSP that had a lot of bragging rights. They were early adopters of VoIP and unified communications and had a successful Avaya practice. They were one of the first to become a SharePoint reseller and had even won a project with a Fortune 50 company. They had a successful Microsoft Dynamics practice, an ECM (enterprise content management) division, a Web development practice, and an infrastructure division that was skilled in desktop and server virtualization, and they even hosted some of their customers’ applications in their data center. To make matters worse, 2009 was not exactly a booming economy. In fact, if there was ever a time to adopt a “take what you can get” attitude in business, this was the time to do it. But, not Choice Solutions; this was the time when it took a firm stance and decided to make some radical moves, eliminating all their business practices except virtualization over the next year and a half. “The reality was we were losing our market edge,” recalls Steinlage. “We were only winning about 4 out of every 10 deals we were in, and our competitors were cherry-picking our best team members within our business practices. All our research pointed to virtualization as being the best bet, so that’s where we put all our focus.”

Choice Solutions had long-term customers within each of its business practices that it still had obligations to service, and it had good people within those business practices that it didn’t want to let go. “In some cases, we found other VARs that we felt had been viable competitors within a technology practice, and we approached them and turned over certain customers to them,” says Steinlage. “In some instances where we had a good team member who wasn’t able to make the transition to a virtualization engineer or technician, the competitor hired that person.” The harsh reality, however, was that very few of the SharePoint, Microsoft Dynamics, or Avaya technical skill sets translated to virtualization skill sets, and by the end of 2010, Choice Solutions’ employee numbers had dwindled to 30.

Step #2: Hire And Train The Best Virtualization Workforce Possible
After stripping its business down to its core virtualization talent, Choice Solutions’ next focus was building up its expertise. The first part of this goal was hiring the best talent it could find. “We identified all the certifications held by the very best virtualization engineers and then set out to hire the top performers within this group,” recalls Steinlage. “This group represents the top 10% to 15% of IT skill sets available in the marketplace, so we knew we had our work cut out for ourselves.” The solutions provider achieved this task by setting up a thorough interview process that included, as one of the steps, having a candidate cross-examined by a team of his top engineers, sales reps, and internal support staff. This helped the company in a couple of ways. First, it made his team feel empowered that they were part of this important process and helped boost the corporate culture. And second, it helped Steinlage and his team more quickly identify the right fit for Choice Solutions. One of the most important litmus tests he used during the interview process was to gauge a candidate’s willingness to earn advanced certifications. “Not only does this speak to their work ethic, but with some of these advanced certifications, like CCIA [Citrix Certified Integration Architect], they can’t fake their way through. They really need to know the technology.”

According to Steinlage, there are a few companies that have one or two CCIA-certified engineers on staff. At press time, Steinlage has 13, and 2 more engineers are close to completing their certification. “The CCIA for virtualization is the highest Citrix certification and focuses on best practices for analysis and design of comprehensive, end-to-end virtualized environments,” says Steinlage. “The architect-level CCIA certifies the skills required for successful deployments, helping organizations improve implementations through lower costs, increased performance, and reduced time.” Additionally, the certification demonstrates the certificate holder has extensive architect-level field experience with virtualization solutions like Citrix XenApp, Citrix XenDesktop, and Citrix XenServer. Choice Solutions is so emphatic about training that it has invested in an on-site lab and offers some kind of hands-on training on a daily basis with senior engineers training junior engineers. All engineers average two weeks of off-site training, plus twice a year he brings engineers to headquarters — he has five locations throughout the U.S. — for corporate training. “This exercise is more about getting the team members together and giving them a general overview of all the different solutions we have, so they can determine where they can best contribute to the company,” says Steinlage. “It’s also a great team-building experience, giving engineers and technicians from different offices a chance to put a face with a name of someone whom they may have only interacted with over the phone previously.” He emphasizes this last point, stating that team-building exercises help build positive relationships and at the same time prevent work atmospheres filled with egotism and possessiveness.

Step #3: Partner With Other Specialists
The final part of Choice Solutions strategy is every bit as important as the other two. The fact is that your customers do prefer to work with fewer (ideally just one) solutions providers. And, the reality is that even a specialist has to be able to address its customers’ other IT pain points. The difference with Choice Solutions, however, is that it has learned to form strategic partnerships to fulfill its customers’ nonvirtualization needs, and it uses a professional organization called Avitas Partners (www.avitaspartners. com), which serves as both a peer group and a national network of IT service providers. The group is designed to help IT solutions providers share engineering talent, best practices documents and processes, vendor partner relationships, and training. “Within our group there are eight other companies similar in size to ours, located throughout the country,” says Steinlage. “Using Microsoft Lync, we’re able to collaborate with this group. We have a conference call once a month, and we meet face-to-face quarterly.” Not only does the group represent complementary skill sets to Choice Solutions’ skills (e.g. it also helps the solutions provider leverage relationships with some of its tier-one vendors such as Microsoft). “It gives us a much stronger voice if we need their help with a problem, and it makes it easier for them to reach 10 companies at once by sending a rep to one of our quarterly meetings,” says Steinlage. Not only does Choice Solutions leverage the group for idea sharing, it sometimes hands off leads to partners in geographic locations where Choice Solutions doesn’t have as strong a presence.

Virtualization Experts In High Demand
With all the benefits to be realized from virtualization, such as improved security, lower energy and IT management costs, and faster data recovery times, Steinlage’s predictions about virtualization’s growth were right on the mark. And his decision to build his business on this burgeoning trend has proven to be a wise one as well. “Our expertise is leading us into deals with larger companies than ever before,” he says. “We even have Fortune 500 companies seeking our consulting and implementation expertise with their server and desktop virtualization deployments.” Not only is Choice Solutions being pulled into larger deals, it’s win rate has nearly doubled from what it was three years ago (now at 85%). And as it is with a healthcare specialist, Steinlage is able to charge more than he did previously because of the level of expertise he has on staff. “We increased our hourly rates 30% over three years, during a tough economy,” he says. “And we receive less push back on price than we did previously.” What’s more is that since 2009, the company has doubled its profits year-over-year, and it’s on track to repeat that trend in 2012.

Even though Choice Solutions’ business strategy is vastly different from what many other VARs and MSPs are doing to grow their business, there’s a clear lesson to be had by all channel companies. The lesson is that if you find yourself winning less than half the deals you’re competing for and you’re losing top employees to your competitors, it’s probably a sign that you need to get refocused on the things that matter most.